Denis Brosnan was not speaking idly when he said this week that Kerry would not be frightened of taking on an acquisition of up to £1 billion, and certainly this week's results from the group show that Kerry has the financial wherewithal to support an aggressive acquisition programme.

The key to Kerry's ability to tackle big corporate deals in relatively close proximity to each other is the group's ability to churn out huge volumes of free cash which allow it to pay down debt quickly while still being able to fund acquisitions and capital expenditure. Add in modest share issues to support the debt funding and Kerry is in an enviable position to push ahead and consolidate its position as one of the market leaders in food ingredients.

To put Kerry's cash-generating ability into context, the group spent close on £400 million (€315 million) last year on acquisitions and capital expenditure while its net debt rose by just £164 million. And the interest on the 1998 net debt was covered 3.7 times by operating profits, a substantially higher level of interest cover than the 2.7 times the group coped with after the DCA acquisition three years ago.

But while the group has been at pains to get a message across that it is still committed to expanding its consumer foods business, the indications are that high-margin food ingredients acquisitions will be the main preoccupation in the short-term.

Kerry has not made a significant consumer foods acquisition since Mattesson Walls three years ago - while in the same period it has spent more than £700 million on large food ingredients acquisitions in Britain and Europe, as well as establishing beachheads in the Pacific Rim and Latin America. Expect more of the same - the periodic big deal accompanied by a clutch of smaller acquisitions in the ingredients business.